The Bill has now cleared the House of Commons and awaits Royal Assent.
The changes effectively close a loophole which had been previously described as the “Achilles heel” of the Bill. Green groups and peers had feared that large numbers of these credits would be bought to meet the 80% carbon emission reduction target rather than delivering reductions within the UK.
The amendment will require the Secretary of State to set in secondary legislation a binding limit on the use of emission reduction credits for each budgetary period, taking into account the views of the Committee on Climate Change. Any excess credits above the limit will not be counted towards the UK’s carbon account.
Limits will be set 18 months before the period in question, subject to affirmative resolution. This would mean the government’s proposals would be fully debated in both Houses of Parliament at least every five years. However the amendment will not affect the first budgetary period, where the no limit is to be set.